Saab Moves Closer To Takeover of ThyssenKrupp Sub Building Operations in Sweden

Apr. 14, 2014 - 03:42PM
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Saab may take over ThyssenKrupp Marine Systems operations in Sweden. (ThyssenKrupp Marine Systems)

HELSINKI — The Swedish government has welcomed Saab’s push to take over ThyssenKrupp’s submarine building operations in Sweden, which form part of ThyssenKrupp Marine Systems (TKMS). The acquisition will impact TKMS’ main facilities in Malmö, Karlskrona and Muskö.

A memorandum of understanding (MoU) reached between Saab and ThyssenKrupp provides the German group with the opportunity to exit naval shipbuilding in Sweden at a time when the Swedish government is reshaping the industrial side of Swedish defense by making Saab the sole candidate to build the Navy’s A26 next-generation submarine.

“The MoU is a welcome development,” said Karin Enström, Sweden’s defense minister. The MoD was instrumental, in February, in withdrawing TKMS’ contract to not only design and build the A26 but also undertake refits of the Navy’s Götland-class submarines. The new acquisition and refit programs have a total budget of about $4.5 billion.

Under the MoU, Saab is proposing to acquire all of TKMS’ primary submarine production sites in Sweden, including design centers, R&D units and shipyard capacity. Saab CEO Håkan Buskhe described the dialogue as being at “an early stage negotiations phase.”

The MoU culminates several months of high tension between ThyssenKrupp, the MoD and FMV, Sweden’s defense materials procurement agency.

This tension peaked on April 8 when an FMV transport convoy, under military escort, raided TKMS’ south coast headquarters in Malmö to secure all A26-related technologies under the $100 million Swedish state-funded A26 submarine program that is run by TKMS but which was voided when the MoD revoked its contract with ThyssenKrupp in February.

However, it now appears that FMV officials left empty-handed, failing to locate or secure the classified defense documents and naval technologies relating to the A26, which sparked the raid.

FMV stated that the primary purpose of the “Malmö operation” was to ensure that the state regained control of all advanced defense technologies attached to the A26 program so that it does not leave the country.

In February, Saab secured an $8 million contract from the MoD to conduct a root and branch evaluation of the company’s underwater naval capability. Saab has until June to present a formal self-assessment of its capability to take over the A26 project and refit the Götland-class subs.

“The goal is to ensure that we have a collective competence. This is what we have to deal with and that’s what we think is possible,” said Buskhe.